Stocks Since 1871: Can the Fed Fight History?

That pretty, pink long-term trendline would seem to point to an ever more optimistic future. But our perspicacious cubicle-mate here at MarketBeat central — Journal veteran E.S. Browning — points out something interesting.

Over time the market has meandered above and below the long-term trendline. But not since the early 1990s have we languished below it. It would seem then, that we’re overdue for another downturn. (Or at least a prolonged period of sideways weakness to allow the trend to catch up.)

This is informative in light of the Fed’s recent QE2 push that is designed — at least in part — to keep stocks elevated. But the chart suggests that gravity will eventually take over.